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Business Day

Black Executives Join Forces, Forming a PAC to Back Them Up

Once an informal network, a group of friends and associates is organizing a united political push on issues like education, employment and voting rights.

By KATE KELLY

October 24, 2017

The organizers of a political action committee backed by black executives include, clockwise from left, Robyn and Tony Coles, Charles and Karen Phillips, and Marva Smalls. They were at the Coles’ house on Kiawah Island, S.C., in August.

Kate Thornton for The New York Times

Black Executives Join Forces, Forming a PAC to Back Them Up

The organizers of a political action committee backed by black executives include, clockwise from left, Robyn and Tony Coles, Charles and Karen Phillips, and Marva Smalls. They were at the Coles’ house on Kiawah Island, S.C., in August.

Kate Thornton for The New York Times

By KATE KELLY

October 24, 2017

Dozens of black executives and their spouses joined Senators Cory Booker and Kamala Harris, as well as Eric H. Holder Jr., the former attorney general, for a private dinner in July in Bridgehampton, N.Y. Over kale salad and sea bass on the grounds of a hotel, the executives sought advice about their intermittent fund-raising efforts to address political and social issues, and for the candidates who support those causes.

Ronald Kirk, a former mayor of Dallas and a lawyer who served in the Obama administration, had the bluntest message. “You’re wasting your money,” he recalled saying. “My advice is: Get organized.”

It was a crystallizing moment. Many attendees had long been part of an informal group of friends and associates who raised money for philanthropies or policy issues on an ad hoc basis. At the dinner, they decided it was time to use their wealth and stature in a more formal way.

By early 2018, the group hopes to start a political action committee, creating a new fund-raising model for corporate executives of color. The group would support candidates of any political party who fit the PAC’s agenda.

The main organizers — including Charles Phillips, chief executive of the software company Infor; Tony Coles, head of the biotech firm Yumanity Therapeutics; Marva Smalls, global head of inclusion strategy for Viacom; and William M. Lewis Jr., co-chairman of investment banking at Lazard — are still in the planning stages for the PAC.

President Barack Obama meeting in 2009 with financial leaders including Kenneth I. Chenault, left, the chief executive of American Express.

Susan Walsh / Associated Press

They are focused on areas like access to education and employment, as well as voter participation. But they are still trying to find consensus. Many don’t want to narrowly define the mandate around race, since initiatives like improving school quality and job training are as much about geography and income level.

The 10 or so core organizers, who meet every other Sunday in Manhattan, have hired a lawyer to get the paperwork ready but haven’t started to raise money. They plan to create three structures: a “super PAC” to run political ads or host events; a federal PAC to support candidates; and a 501(c)(4) group, or social welfare nonprofit, that will do a mix of the two.

“What we’ve been doing is just writing checks for years, and we don’t know what happened” once the money was received, Mr. Phillips said. “We’ve got to learn from the Koch brothers, do what they do, have them sign pledges.”

The core organizers plan to reach out to a group of roughly 100 black executives, lawyers and other professionals who attended the July dinner. They have mutual friends. They meet socially in places like East Hampton, N.Y., and Kiawah Island, S.C. They attend the same charitable functions, like the annual fund-raising dinner in New York City for the NAACP Legal Defense and Educational Fund.

The group has been increasingly stepping into the national debate about race and inequality. Two years ago, it funded screenings so that 320,000 students across the country could see “Selma,” the movie about a crucial moment in civil rights history. After the police shootings of black people in Ferguson, Mo., and other cities, the group raised $1 million in 48 hours to fund a police reform initiative. And in August, it supported Kenneth C. Frazier, the chief executive of Merck and a member of the extended network, after President Trump criticized him.

“We have now entered more the ranks of corporate America with the financial wherewithal, with the thought leadership, to now engage around the issues,” said Ms. Smalls, who while growing up in South Carolina in the 1960s watched her parents help organize get-out-the-vote rallies and fight for equality in local schools.

The election last November, Ms. Smalls said, was an “inflection point.” The question now, she said, is “defining a narrative, politically, that matters to our community.”

The ranks of black senior executives remains small. In 2001, when Kenneth I. Chenault was named to the top job at American Express, just one other black chief executive was running a Fortune 500 company, Franklin D. Raines of Fannie Mae. On this year’s list, Mr. Chenault, who is preparing to step down after a 16-year tenure, was one of four.

In August, Ken Frazier, the Merck CEO, resigned from the president’s manufacturing council after President Trump failed to directly condemn the white nationalists involved in the violent protests in Charlottesville, Va.

Alex Brandon / Associated Press

While black business leaders have long used their money and influence, they have often worked individually behind the scenes. Still, many have proven adept at mobilizing money and support for causes dear to them.

Mr. Chenault is a prime example. In September, he hosted a dinner at his apartment for Cashmere Nicole, who founded an online cosmetics company, Beauty Bakerie, with her own money. Mr. Chenault, Infor’s Mr. Phillips, Lazard’s Mr. Lewis and Adebayo Ogunlesi, a private equity executive who is Goldman Sachs’s lead director, all provided seed capital for the company.

The shift from an informal network to a more organized effort was marked in 2015 by an appeal by Mr. Lewis.

Early that year, he sent an email to friends and fellow executives, asking if they’d like to pool funds to sponsor student tickets to “Selma.” After seeing the film, “I walked out of the theater with my wife and said, ‘Every New York City eighth grader should see this movie,’” Mr. Lewis recalled in an interview at the time. They raised more than $2 million and funded screenings in about 30 cities.

Early in 2017, some of the same executives funded student screenings of “Hidden Figures,” which told the story of three female black mathematicians who worked for NASA during the 1960s. They paid for 63,000 students to see the movie in 25 different places, including Britain and Nigeria.

A focus on police reforms took shape after a white police officer shot and killed an unarmed black teenager in Ferguson during the summer of 2014. That deadly encounter, and similar ones, sparked nationwide protests.

The next July, a handful of executives were at a charity dinner, and the NAACP Legal Defense and Educational Fund came up. Its president, Sherrilyn Ifill, was being inundated with requests to provide legal work and organize assistance in embattled communities. Tapping the informal network of friends and associates, the group quickly collected $1 million.

“This group provided key support that enabled us to be influential at a critical time when we saw a window was open,” Ms. Ifill said.

Edith Cooper, head of human capital management at Goldman Sachs, spoke out on LinkedIn to say she was “outraged and frightened by what took place in Charlottesville and by President Trump’s response.”

Graham Morrison / Bloomberg, via Getty Images

During that period, Mr. Phillips, Ms. Ifill and Raymond J. McGuire, the head of corporate and investment banking at Citigroup, met with officials at the New York Police Department to talk about the agency’s attempts to improve relations with the black community. In a series of meetings, they discussed neighborhood policing plans, community meetings and changes in police discipline procedures, tracking data on the department’s progress as new steps were taken. Mr. Phillips and Mr. McGuire later joined the board of trustees of the New York City Police Foundation.

Members of the group are also taking more public stands. In August, Mr. Frazier, the Merck chief executive, resigned from the president’s manufacturing council after Mr. Trump failed to directly condemn the white nationalists involved in the violent protest in Charlottesville, Va. The president then criticized Mr. Frazier, accusing him on Twitter of charging “ripoff drug prices.”

Now that Ken Frazier of Merck Pharma has resigned from President's Manufacturing Council,he will have more time to LOWER RIPOFF DRUG PRICES!

Mr. Frazier’s inbox was soon filled with supportive emails. Edith Cooper, the head of human capital management at Goldman Sachs, spoke out on LinkedIn, saying she was “outraged and frightened by what took place in Charlottesville and by President Trump’s response.”

Through a spokeswoman, both Mr. Frazier and Ms. Cooper declined to comment.

Since the July dinner at Topping Rose House in Bridgehampton, the PAC’s organizers have been trying to work out their priorities and their differences.

Some likely donors in the broader network want to see dedicated staff and a clearly defined action plan before they get involved. Others question whether a PAC that doesn’t support a particular party can make a difference.

The organizers have consulted with Mr. Kirk about the best legal structure. They met with senior black politicians and set up brainstorming sessions with think tanks in Washington.

Mr. Coles of Yumanity Therapeutics and his wife, Robyn, held an event at their Kiawah Island home, where Senator Tim Scott, a Republican, and Representative James E. Clyburn, a Democrat, mingled with some of their friends. The conversation focused partly on education and work options for the state’s younger generation.

“As African-Americans have advanced in business, and assumed important positions across the board,” Mr. Coles said, “I think we are finding our way to adding to or extending what many of our forebears have done. And in a sense, it’s our turn now, to contribute to this kind of leadership.”